E*Trade ( ET - Get Report) may not be ready to abandon hopes of joining forces with Ameritrade ( AMTD - Get Report) just yet.

According to a published report, E*Trade has raised its bid for its fellow online broker, offering the target firm a 49.5% stake in the combined company along with $2 billion in cash. In May, Ameritrade fielded a merger offer from E*Trade, but said that while it was exploring strategic alternatives, it didn't consider itself for sale.

Then last week, Ameritrade said it was in talks about a potential merger with TD Waterhouse USA, part of Toronto-Dominion Bank ( TD - Get Report).

E*Trade had previously said a merger would give Ameritrade shareholders 47.5% of the combined company, plus about $1.5 billion in cash. Now, according to The Wall Street Journal, E*Trade has said it's willing to leave a big part of the combined operation in Omaha, where Ameritrade is based, with a promise that the Ameritrade brand will continue to exist in some form.

Shares of Ameritrade were up 45 cents, or 3%, to $15.35 in premarket trading Monday. E*Trade closed Friday at $12.40.